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Myitsone Dam Strains Relations with China and Myanmar




Suspension of the US$3.6 billion China-backed hydraulic dam in Myanmar have threatened the longstanding close China-Myanmar relationship


One day before China’s National Day celebration, Myanmar’s President Thein Sein called a halt to the on-going Myitsone hydroelectric dam project that was being invested and commenced by the China Power Investment Corporation, a Chinese state-owned company. The dam was planned to be completed by 2017 and was expected to provide up to 6000 megawatts of electricity for China.

The Myitsone dam project will damage the environment of the Myitsone area and will bring harm to the farming and fishing communities, especially to the agriculture that is financed by locals,” Thein Sein stated at a meeting. “The residents living near the dam will be endangered if there is an unexpected natural disaster that may break the dam.

He said the project wouldn’t be resumed during his tenure. However, the president noted that the Chinese and Myanmar governments will further negotiate over the issue so as to keep bilateral ties strong.

According to sources, the Myitsone dam project was initiated between Chinese President Hu Jintao and the Myanmar’s junta chief Senior-General Than Shwe during the 2005 Asian-African Summit in Jakarta, Indonesia. It was agreed in the meeting that electricity generated by the hydro-power station would be sold to China.

The Myitsone dam project will damage the environment of the Myitsone area

The dam is planned on the Irrawaddy River, which is the country’s largest river as well as the most important commercial water way that flows through Myanmar from north to south. The Irrawaddy River Delta is one of the country’s most densely populated regions with mainly farmers and fisherman benefitting from the river. At the same time, the Irrawaddy region is abundant in wildlife, including the well-known Irrawaddy dolphins and some crocodiles.

The dam project on the Irrawaddy has also drawn concerns from environmental organizations because it will impact on the river’s ecosystem. The farmers and the fishermen will be facing economic losses after the completion of the project for some areas are expected to flood in the future. The locals have been protesting continuously against the project, especially those facing relocation. In addition, local people often expressed their dissatisfaction towards China as the Chinese companies have imported their own domestic labor force instead of creating job opportunities for the local community.

Some from Myanmar’s new, younger generation stated that they expect their country to be a part of the new world order instead of being “half-colonized by China.” As a result, the Myanmar government previously had to keep an armed military presence around the construction site to ensure the process.

Thein Sein’s decision to suspend the dam project following the widespread concern of the people has been welcomed by environmental organizations and human rights activists. Furthermore, the government announced on Tuesday that it will grant freedom to over 6,300 prisoners. Reports said the United States and the Europe would consider lifting sanctions against Myanmar if and when it really releases the prisoners.

Myanmar has been under U.S. sanctions since it suppressed student demonstrations in 1988. Recently, the United States has announced that it would change its foreign policy towards Myanmar, including lifting sanctions from the World Bank and International Monetary Fund (IMF). This month, the IMF is planning to send officials to Myanmar to help reform the country’s exchange rate system.

Facing a series of changes, China showed concerns regarding its relationship with the Southeast Asian nation. China has become Myanmar’s biggest investor and a highly valued ally. For China, Myanmar is an important path to the Indian Ocean. Plus, China is building an oil pipeline in Myanmar from a port on the Bay of Bengal up into China’s southwestern Yunnan Province which will help China reduce dependence on the Malacca Straits to deliver oil coming from the Middle East and Africa.

Statistics show that China’s investment in Myanmar reached US$12.3 billion in 2010 and bilateral trade in fiscal year 2010-2011 amounted to US$5.3 billion. In May, Thein Sein signed some 36 agreements and MoUs with China during his visit to Beijing, including loan and credit line agreements worth more than US$765 million.

Based on the aforementioned facts, analysts say even though some events made the China-Myanmar relationship tense, neither side would risk jeopardizing their close ties.

On Monday, Myanmar’s Foreign Minister U Wunna Maung Lwin came to Beijing to meet with China’s Vice-President Xi Jinping as well as his counterpart Yang Jiechi. Chinese state media reported that Myanmar agreed to “properly settle matters” over the suspension of the hydro-electric dam.

As for the environmental problems that concern the local residents, China said the project “had been fully examined” before the construction, and it criticized the United States and Europe for interfering and exaggerating the issue.

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